German Chancellor Angela Merkel has not ruled out a so-called "haircut",
or write-down, of Greek debt in the next few years, marking an apparent
softening in position.

After being vehemently opposed to accepting a "haircut", Mrs Merkel said in an interview with Bild am Sonntag that it could be considered from 2014 if Athens' financial situation improves.

"If Greece can get by on its income one day again without taking on new debt, then we must look at and assess the situation. That won't be the case before 2014/15 if everything goes according to plan," she told the paper.

Opposition politicians have accused Merkel of playing down the need for a write-down of Greek debt holdings by public institutions such as other eurozone governments and the European Central Bank because of federal elections expected to take place on September 22, 2013.

In the Bild interview, Mrs Merkel contested the charge that she had refused a "haircut" because of the looming elections.

"The current aid programme for Greece runs until 2014. For the achievement of certain budgetary goals we have given the Greeks two years more time until 2016," she said.

Many in Germany consider a write-down of Greek debt holdings inevitable, which would mean German taxpayers footing part of the bill.

Norbert Barthle, budgetary spokesman for Mrs Merkel's Christian Democratic Union, told German radio last week: "It could be the case, according to the current planning, that a haircut could occur in 2020."

But on Friday, Finance Minister Wolfgang Schaeuble said speculation on a "haircut" sent "the wrong incentive" to Greece because it reduced the pressure on the Athens government to enact structural economic reforms.

He has previously said that the "haircut" under consideration by the International Monetary Fund would not be possible for legal reasons.

Some eurozone states however have said they would "not exclude" the possibility of writing off some debt from 2015 onwards.

After marathon talks early last week, finance ministers from the 17 eurozone countries agreed to release €43.7bn (£35.4bn) in emergency aid for Greece.

They also said in their statement that ministers would "consider further measures and assistance" for the debt-wracked country once the books were back in the black.

Mrs Merkel also said she favoured considering tougher sanctions for indebted eurozone states.

"In the long term I am definitely of the opinion that we consider how we develop legal procedures for states which do not comply with their commitments," she said.

If Greece were to have to leave the euro against its will, the consequences would be far costlier than the path that has been taken, Merkel warned. "We should avoid all uncertainties," she added.

Merkel also told Bild that she understood the scepticism of many of her compatriots over Greece but that she saw a determination in Athens to reorganise the country and that rescuing Greece from economic collapse was in Germany's best interests.

On Friday she secured the vote from German lawmakers to release the €43.7bn in aid to Athens